Encryption ETF welcomes regulatory breakthrough, and the listing channel is expected to be further expanded.

The US encryption ETF market is迎来新的发展机遇. Regulatory agencies have recently taken a series of measures to create a more favorable environment for the operation and listing of encryption asset ETFs. These changes not only enhance the efficiency of existing products but also pave the way for more encryption assets to enter the ETF market in the future.

Physical Redemption Mechanism Approved, Enhancing Operational Efficiency

Regulatory authorities have recently approved the use of physical subscription and redemption mechanisms for encryption ETFs. This decision is significant for improving trading efficiency and market liquidity. Previously, Bitcoin and Ethereum spot ETFs could only use a cash subscription and redemption model, which has issues such as high costs, slow settlements, and significant slippage risks, limiting the appeal of the products.

The new mechanism allows authorized participants to directly create or redeem ETF shares using encryption assets, significantly simplifying the operational process. This not only improves operational efficiency but also establishes a more direct connection between encryption assets and traditional financial products, which is expected to attract more institutional participation.

Industry insiders generally believe that this change marks a significant shift in regulatory attitude, taking an important step towards building a more reasonable encryption regulatory framework. It will not only reduce product costs and improve efficiency but will ultimately benefit investors.

In addition, regulators have approved a series of proposals to promote market development, including the listing and trading of mixed spot encryption ETFs, specific options trading for encryption ETFs, and so on, further enriching market tools and enhancing flexibility.

A universal listing standard may be introduced to simplify the approval process.

In terms of the listing channel, a certain exchange submitted a milestone rule amendment proposal to the regulatory authorities. This proposal aims to establish a universal listing standard for the commodity-based trust share (CBTS), which is expected to greatly simplify the approval process for encryption ETFs.

The proposal provides a comprehensive upgrade to the existing rules, expanding the definition of CBTS, allowing for more flexible product structures and a broader range of underlying assets. At the same time, the proposal clarifies three types of assets that can be directly listed, laying the foundation for the "listing as access" mechanism.

The new rules also strengthen information disclosure requirements, requiring issuers to publicly disclose core data daily, thereby increasing product transparency. Notably, the proposal also leaves room for the encryption staking mechanism, which can be introduced into product design as long as sufficient liquidity is ensured or a robust risk control system is established.

The proposal is currently still in the public review stage and is expected to be finalised within 60 days. Once approved, it will open an efficient and transparent listing channel for commodity ETFs, including encryption assets.

Possible Impacts of New Regulations

Once the new rules are implemented, they will have a profound impact on multiple parties:

1. A certain derivatives exchange may become the "certification center" for altcoins entering the ETF market. As long as a certain asset has more than 6 months of compliant trading records on the platform, it qualifies for listing.

2. Regulatory responsibilities are clearer. The path for ETF products is determined by securities regulatory agencies, while asset qualifications are overseen by commodity futures regulatory agencies.

3. More altcoin ETFs may be quickly approved for listing. Currently, more than a dozen encryption assets meet the new standards, and it is expected that related ETF products may be launched as early as the fourth quarter of this year.

4. Mainstream exchanges may also quickly follow similar rules.

Overall, these regulatory changes have created a more favorable environment for the development of the encryption ETF market. They not only improve the operational efficiency of existing products but also pave the way for more encryption assets to enter the ETF market. With the implementation of these new rules, we may see a new wave of development in the encryption ETF market.